The Blu-ray and HD DVD disc formats are set to co-exist with neither coming out on top, according to Screen Digest. It says that whilst Blu-ray Disc (BD) is selling more units than rival HD DVD at the moment, in the long term both formats will establish a viable user base, allowing them to co-exist for the foreseeable future.

The prediction goes along with what BDA Chairman Frank Simonis told Tech.co.uk at IFA 2007 in Berlin earlier this month. He said in the interview that both formats might easily exist alongside each other for some time to come - it's even possible that Europe and America might opt to support different formats.

No winner in HD war

"Yeah it's certainly possible," he said. "We've seen in Japan that the war is almost over already. Blu-ray is well on top in East Asia. But it's perfectly conceivable that, for instance, Blu-ray might win in the US but HD DVD could be chosen in Europe."

Screen Digest says that the Hollywood studios opting to support a single format only could be missing out on over $270m (£125m) of consumer spending in 2008 alone.

Equally, Blu-ray-exclusive studios Sony, Fox and Disney could miss out on $175m (£88m) in consumer spending by not publishing their films on HD DVD. However, Blu-ray's stronger sales mean that HD DVD-only supporters are at risk of making the largest individual losses. With so much at stake, Screen Digest expects several single-format studios to reassess their positions during 2008.

Studios set to miss out

"Christmas 2007 is going to be critical for the hi-def video business. Both formats will be seeking to secure consumer buy-in to their proposition during the critical holiday season. But with so much at stake on both sides we think it is highly unlikely that one format will emerge as the 'winner'," says Richard Cooper, Screen Digest video analyst.

"Once it becomes clear that both formats are gaining customer acceptance, studios that have chosen to support one format over the other will realise that they are missing out on potential sales and will have to decide how long they can afford to place principle over profit. We believe that eventually most will decide to offer their titles on both HD DVD and Blu-ray in order to maximise their returns," he said.